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What is the difference between the APR and the stated interest rate?

April 26, 2017Apr Interest rate

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What is the difference between the APR and the stated interest rate?

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APR calculates the total cost of a mortgage loan and expresses it as a yearly rate. That means that APR takes into account mortgage insurance, points and certain fees paid at origination, in addition to your monthly interest payment. This generally results in a rate slightly higher than the stated interest rate on the loan.